Role of TPA in Health Insurance

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You may have come across the abbreviation TPA while reading about claims in health insurance. Or you may have heard insurance companies say that you can contact their TPA for claim assistance. But what exactly is this TPA? How does it work? How can a TPA help you with your health insurance claim?

We answer these and some more questions - in this article. So, let’s begin!

What Is A TPA?

Health insurance companies can choose to manage their claims processing in-house or outsource it to TPAs. So, a TPA or Third-Party Administrator is an outsourced agency for processing insurance claims.

TPAs are licensed by the IRDAI (Insurance Regulatory and Development Authority of India). And, as per IRDAI rules, an insurance company can have tie-ups with multiple TPAs, and a TPA can serve more than one insurance company.

TPA is an agency appointed by an insurance company to -

  • Establish a network of providers, including hospitals.
  • Enrol customers and generate their health card. They can use this card while making a claim under the policy.
  • Process claims (both cashless and reimbursement) on behalf of the insurance company.

TPAs are not independent bodies. The insurance regulator, IRDAI (Insurance Regulatory and Development Authority of India), regulates TPAs as separate licenced entities. They are appointed and governed by the scope, specifications, terms and conditions outlined in their contract and SLAs (service level agreements) with the insurance company.

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Role Of TPA?

Here’s a list of roles or functions carried out by a TPA -

  • Strong Hospital Network

    TPAs partner with hospitals all around the country to define the cashless process, the rates to be charged for treatments and surgeries, etc.

  • Smooth Claim Settlement

    The primary responsibility of the TPA is to process claims, both cashless and reimbursement. They are in charge of collecting and processing a claim, as well as the paperwork sent by the customer or the hospital, and comparing the claim to the policy terms and conditions.

    The service they provide is governed by the SLAs outlined between the insurance company and the TPA, as well as how they are monitored and executed.

  • Issues Health Card

    The TPA registers you under a policy in their system and issues Health Cards containing information about you and your policy. This card can be used to make cashless claims in a hospital.

  • Record Maintenance

    TPA is also in charge of maintaining important records submitted by the hospital or the customer at the time of the claim.

  • Customer Support

    TPAs offer support for your claims - you can call them with any questions you may have about your claim intimation, document submission, claim status, etc.

    Most TPAs are available 24X7 to help you with your queries. You can contact them by calling their toll-free numbers or by emailing them your query.

  • Claim Tracker

    You can track the status of your claim with the TPA by calling their toll-free number or visiting their website.

  • Value Added Services

    Depending on their agreement with the insurance company, certain TPAs also help you in availing several value-added services like medical checkups, ambulance facilities, wellness programs, medicines supply, and so on.

    Now that you’ve understood the meaning and role of TPA’s, let’s look at how they work in case of both cashless and reimbursement claims.

How Does A TPA Work?

Here’s a list of roles or functions carried out by a TPA -

  • In Case Of A Cashless Claim

  • Informing The TPA

    If you plan to get hospitalised for any treatment, you can check with your TPA in advance to see if your desired hospital is included in the list of network hospitals. If it is on their list, you can give details about the date of admission as well as the specifics of the treatment for which you will be admitted to the hospital.

  • Getting The Claim Intimation Number

    After you share all the required details, the TPA will notify the insurance company of the claim and give a claim intimation number to you.

  • Providing Details To The Hospital

    On the date of admission, you’ll have to give the hospital information about your coverage and the TPA. After this, the hospital will notify the TPA of your hospitalisation and claim by submitting a pre-authorisation form.

  • Pre-Authorisation Approval

    After receiving the intimation from the hospital, the TPA will provide pre-authorisation approval to the hospital in accordance with the coverage and terms and conditions.

  • Submitting Documents To The TPA

    At the time of your discharge, the hospital will submit all the claim documents like the pre-authorisation approval form, duly filled claim form, discharge summary, bills, indoor case papers, reports, etc. to the TPA. In case the TPA needs any additional documents, they will inform and get those from the hospital.

  • Claim Processing

    The TPA will then verify all the documents submitted and process the claim. The hospital will receive a detailed bill that will specify which expenses are covered by the insurer and which are not. The costs that the insurance company does not cover will need to be paid by you. Following your discharge, the insurance company will pay the approved claim amount to the hospital.

  • In Case Of A Reimbursement Claim

  • Informing The TPA

    If you are unable to get admitted to a network hospital for any reason, you must notify the TPA as soon as possible about your admission at a non-network hospital and file a reimbursement claim.

    You must intimate the TPA of a planned hospitalisation at least 24 to 48 hours prior to the hospitalisation. And, in case of an emergency hospitalisation, the intimation must be done within 24 hours.

  • Submitting The Documents

    After you're discharged from the hospital, you'll need to fill out a claim form and submit it along with several original documents, bills, etc. to the TPA. So, make sure you properly maintain all the original documents into a file and also keep a copy of each document for your future reference.

    Here's a list of documents you'll need to submit to the TPA -

    Duly filled and signed claim form. (You can download the form from the insurer's website or also get it by visiting their nearby branch.)

    Health card or policy copy.

    Photo ID of the insured person

    All documents, test reports, films, receipts, and medical prescriptions related to the treatment undergone

    Original copy of the discharge summary from the hospital

    After you submit all the necessary documents, make sure you get an acknowledgement from the insurance company or the TPA.

  • Claim Processing

    Next, the TPA will verify all the documents you submitted. They may also request additional documents. So, make sure you keep a track of the claim process - and submit the requested documents as soon as possible so that your claim can be settled quickly.

    After the TPA has verified all the documents, they will approve your claim and credit the approved amount to your account. They will give you a detailed summary of the claim settlement, including the amount approved and the deductions made. Make sure you check it properly and contact the TPA or the insurance company in case of any issues or errors.

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TPA Vs. In-House Claims - Which Is Better?

The claims of the majority of personal health insurance policies, especially in the private sector are managed internally because it is a core function. This gives the insurance company better control over efficiency as well as experience.

TPAs, on the other hand, can provide larger scale or efficiencies, as well as better negotiating power with hospitals, by consolidating claims across insurance companies.

So, there is no clear answer as to whether TPAs are good or the in-house claims department.

The claim service, whether it is outsourced or in-house, will depend on the quality of the team, processes, execution, and reporting. There are cases where TPAs with an excellent track record perform better than in-house claim departments, and vice-versa.

It is clearly visible when there is a difference in the quality of services provided by the same TPA - who performs well for a corporate policy from an insurer but performs very differently for a retail health insurance policy from another insurer.

Hence, before you go ahead, it is crucial that you learn about the service of the insurer or the insurer's TPA, whichever is the case. For this, you can go through reports published by IRDAI or the insurer on its own website. You can also learn from the experiences and reviews of others. So, ask around, check the reviews of past customers on the insurer’s website, etc.

Wrapping Up!

That is all from our side today. Hope you now have enough clarity on what TPAs are, and their role in health insurance. TPAs operate differently in the case of both cashless as well as reimbursement claims - so, ensure you’re aware of all the steps involved to avoid any hassles while making a claim.